Momentum builds as new listings rise and market activity edges higher nationwide
Canada’s residential real estate market has shown some positive signs over the last month and a new homebuilding drive has been announced by the federal government.
Home sales across Canadian MLS Systems rose by 1.1% in August 2025 compared to the previous month, marking the fifth month in a row of growth and bringing total gains since March to 12.5%.
The Canadian Real Estate Association reported Monday (9/15) that it was the most active August in four years as activity in the Greater Toronto Area slowed slightly, but was more than offset by increases in Montreal, Greater Vancouver, and Ottawa.
“Activity has continued to gradually pick up steam over the last five months, but the experience from a year ago suggests that trend could accelerate this fall,” said Shaun Cathcart, CREA’s Senior Economist. “Part of what drives sales at different points in the year is the availability of a lot of fresh property listings for buyers to buy. For the fall market, that always happens right at the beginning of September, and this year was no exception. If last year is any kind of guide, then there is the potential that sales could really pick up in the next month or so depending on how many buyers are drawn off the sidelines, particularly if we see a September rate cut by the Bank of Canada.”
Among the highlights for August:
- National sales increased 1.1% month-over-month
- Actual (not seasonally adjusted) transactions were 1.9% higher than August 2024
- Newly listed homes rose 2.6% month-over-month
- The MLS Home Price Index (HPI) edged down 0.1% from July and was 3.4% lower year-over-year
- The average national sale price reached $664,078, up 1.8% from August 2024
The rise in new listings outpaced sales, pulling the sales-to-new listings ratio down slightly to 51.2% in August, compared with 52% in July, but this remains in line with balanced market conditions, given the long-term average of 54.9%.
At the end of August, 195,453 homes were available for sale on Canadian MLS Systems, an 8.8% increase from last year and consistent with long-term seasonal trends. National inventory ended the month at 4.4 months, the lowest level since January. The long-term average is five months, with conditions below 3.6 months considered a seller’s market and above 6.4 months a buyer’s market.
New homes pledge
Meanwhile, the federal government has pledged increased homebuilding.
Prime minister Mark Carney said Sunday that too many Canadians are struggling to find homes they can afford and the government aims to address this through a new agency called Build Canada Homes which will facilitate the mass building of new affordable homes with an initial capitalization of $13 billion.
"Canada's new government is relentlessly focused on bringing down housing costs. Central to that mission is rapidly scaling up the supply of homes. Build Canada Homes will transform the way government works with the private sector to build. We will create an entirely new housing industry using Canadian technology, Canadian workers, and Canadian resources – and give builders the tools they need to build more, build sustainably, and build at scale,” Carney pledged.
